Direct Translation via Google Translate. Edited.
[Regnum] A historic drop in software developer Oracle's shares has wiped out $24.9 billion in the net worth of its co-founder, Larry Ellison, Bloomberg reported on December 12.
The company's shares fell 11% after a profit report that highlighted a sharp rise in capital expenditures on data centers for neural networks, as investors feared the costs were too slow to convert into revenue.
Despite the decline, Ellison's stake in Oracle is still worth approximately $202.8 billion, and he's more than $94.9 billion richer than he was a year ago. He also remains the third-richest person on the planet, behind Tesla and SpaceX founder Elon Musk ($462 billion) and Google co-founder Larry Page ($268 billion).
However, his liquid assets are estimated at approximately $34.8 billion, some of which is in illiquid assets, and about 30% of his stake in Oracle is pledged as collateral for personal debt.
Investors are concerned about Oracle's rising AI spending—to $12 billion per quarter—and its rising debt load, which Morgan Stanley forecasts will nearly triple by 2028. The cost of Oracle's default insurance has also risen to a two-year high.
This is a sharp reversal from September, when Oracle shares rose 36%, after which Ellison temporarily displaced Musk as the world's richest person. Since then, Oracle shares have fallen by approximately 40%.
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His problem: AI
Oracle made a $300 billion bet on OpenAI. It's paying the price.
Oracle might have an OpenAI problem.
Might?
Oracle (ORCL) stock has tumbled over 40% from its September peak, erasing more than $360 billion from its market capitalization. Nearly $67 billion of that decline occurred on Thursday alone, as Oracle’s second quarter results failed to assuage a key concern for investors — that the company is too heavily reliant on OpenAI (OPAI.PVT).
Oracle’s AI-fueled growth targets outlined in its first quarter sent the stock to a record on Sept. 10, briefly making its founder, Larry Ellison, the world's richest man. In September, the company told investors its remaining performance obligations (RPO) — or the value of its future revenue from customer contracts signed — had soared nearly 360% to $455 billion.
It was later revealed that ChatGPT developer OpenAI accounted for at least $300 billion of its customer commitments as part of the Stargate project. Since then, its stock has struggled.
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